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Payroll Tax Called ‘Absurd’

Senator Supports Bailout After Initially Opposing It

The MTA will be voting on May 27 on rescinding service cuts proposed as a result of the agency’s budget troubles. Cuts that are expected to be restored include Long Island Railroad (LIRR) weekend service from the West Hempstead station and service to Belmont Park. The MTA has already reduced its proposed fare increases from 27 percent to roughly 10 percent as a result of a bailout plan, passed by the Democratic state lawmakers.

While this may be good news for the MTA, it’s not good for those who will be paying for the bailout — all employers including municipalities and owners of businesses. In order to plug the MTA’s budget deficit, employers will be assessed a tax that amounts to 34 cents per $100 of payroll.


Republican lawmakers including Assemblyman Tom Alfano and Senator Dean Skelos, the minority leader in the Senate, have criticized the bailout as being bad for Long Island businesses that will be further hurt during the recession by having to pay a payroll tax as well as municipalities including the county, towns and villages, which would also have to pay the tax.

Democratic Senator Craig Johnson, who represents the 7th Senate District, could have stopped the bailout by voting against it, but voted with the Democratic majority to pass the bailout bill.

Johnson initially opposed the payroll tax as he said he didn’t trust the MTA. “It seems every time there’s a problem, the MTA cries poverty and says the only way we’re going to solve it is either Albany gives us money and bails us or we’re going to raise fares and cut service. I’m not doing an acronym bailout. There’s an AIG and, for me, it’s the MTA. I’m not going to bail out the MTA with people’s tax dollars. I don’t agree with a payroll tax,” Johson said on April 14.

But, by the first week of May, Johnson favored the payroll tax. “Throughout this process, I have made clear my distrust of the MTA and my concerns about how any proposed plan would affect schools and school property taxes, which make up roughly two thirds of the average tax bill. At the same time, we had to deal with the reality that a dependable, affordable and responsible mass transit system is vital to Long Island,” said Johnson in a statement explaining his vote.

The bailout bill contains a provision for reimbursement of the payroll tax to school districts. The districts would still have to pay the tax, but should receive a reimbursement of the payment. However, some school officials aren’t so sure that the reimbursements will be coming.

At a recent New Hyde Park/Garden City Park Board of Education meeting, school board president Patricia Rudd announced that she, along with several other trustees, made the trip to Albany to personally meet with Senator Johnson and to ask him please not to vote for the bailout.  

Rudd said at that meeting Senator Johnson assured them he would not be voting for the bill and not to worry. “He lied to us.  I can’t put it any other way, he just lied to us,” she said.

Superintendent of Schools for the Sewanhaka Central High School District Warren Meierdiercks called the payroll tax “absurd.”

“Now, we may have to absorb a $400,000 expense. Where do I get $400,000 from? We’ve made all the cuts that we’ve had and now, we may have to pay a $400,000 MTA payroll tax with no guarantee of getting the money back. It’s ridiculous and it’s absurd that this law would be approved and this payroll tax would be passed on the taxpayers of the school district,” Meierdiercks said.